In a watershed moment for India’s technological landscape, EY India’s report, ‘The AIdea of India: Generative AI’s potential to accelerate India’s digital transformation,’ unveils the transformative impact of Generative AI (Gen AI) on the nation’s economy. Released on December 17, the report forecasts a significant addition of $1.2-1.5 trillion to India’s Gross Domestic Product (GDP) over the next seven years, propelling the country into the forefront of the global Gen AI wave.
As the world embraces the era of artificial intelligence, India stands poised to capitalize on the Gen AI wave, with projections indicating a 5.9-7.2% increase in GDP, translating to $359-438 billion in the fiscal year 2029-30 alone. The heart of this economic surge lies in the adoption of Gen AI across various sectors, including business services, financial services, education, retail, and healthcare, reported Money Control.
Improved employee productivity, streamlined operational efficiency, and personalized customer engagement are earmarked as the driving forces behind this economic boom. With technology titans such as Google, Microsoft, Amazon, and IBM racing to create cutting-edge Gen AI solutions, and Google’s recent launch of the powerful AI model Gemini, the stage is set for a dynamic shift in India’s economic landscape.
The survey conducted as part of the report reveals that 75% of organizations consider having a Gen AI strategy essential, with a particular focus on customer engagement. An interesting aspect is that 73% of these organizations plan to collaborate with external tech providers for Gen AI implementation. However, challenges loom large, with 60% acknowledging Gen AI’s influence but 75% expressing a low to moderate readiness to harness its benefits.
Mahesh Makhija, Technology Consulting Leader at EY India, emphasizes the swift adoption of an AI-first approach to digital transformation by organizations, aiming to enhance customer engagement, increase productivity, and achieve greater agility.
In the pursuit of a Gen AI-driven future, organizations grapple with challenges, primarily a skills gap (52%) and the availability of unclear use cases (47%). Surprisingly, only 36% of organizations view data privacy as a significant risk associated with Gen AI. Makhija points out that while organizations express optimism about AI, elevating efforts and increasing government involvement is crucial for realizing its full potential.
The report positions Gen AI as a catalyst for economic growth, suggesting measures such as enabling access to training data, deploying Gen AI systems as public goods, securing critical digital infrastructure, and promoting talent access and public funding for R&D. Aligning with the National Strategy for Artificial Intelligence (2018), the public sector in India is anticipated to leverage Gen AI for the public good, impacting sectors such as education, healthcare, agriculture, and smart cities.
India’s Path to Innovation
Drawing inspiration from global models like the UAE and EU, the report proposes the development of an open-source ecosystem for basic algorithms and training datasets. This approach aims to accelerate Indian entities and startups in developing their Gen AI products and fostering indigenous innovation.
As India embarks on this transformative journey, a parallel narrative unfolds concerning the potential impact of Gen AI on employment. A global survey by Indeed reveals that while 85% of employers anticipate AI creating new job opportunities within 1-5 years, 29% of jobseekers express concerns about potential job losses in their industry or profession.
1. Upskilling Imperative: Approximately 43% of Indian job seekers express the need for reskilling or upskilling, reflecting the evolving employment landscape and the urgency for continuous learning.
2. Optimism vs. Apprehension: While 63% of jobseekers express excitement about AI’s impact on the job market, 29% harbor concerns about potential job losses in their respective industries or professions, underscoring the delicate balance between optimism and apprehension.
3. Ethical Considerations: A notable 20% of jobseekers express concerns about ethical considerations related to AI, indicating the need for transparent and ethical AI deployment in the workforce.
4. HR and Talent Leaders’ Perspective: Over 90% of HR and talent acquisition leaders believe that AI systems and tools will simplify their job responsibilities, with 86% confident that AI can enhance the hiring and candidate experience.
5. Global Variances in AI Adoption: While India emerges as a frontrunner in AI adoption, global variances exist. Japan lags behind, with one-third of HR professionals and over half of job seekers not using AI tools, while France exhibits apprehension, with 30% of job seekers and 25% of HR professionals expressing fear of the technology.
India stands at the cusp of a technological renaissance, with Generative AI poised to redefine its economic trajectory. The EY India report sheds light on the immense potential and challenges associated with this transformative wave. As the nation navigates through the complexities of Gen AI adoption, the synergy between government initiatives, organizational strategies, and public awareness will determine the true extent of India’s rise in the age of artificial intelligence. In addressing the multifaceted aspects of employment, from upskilling initiatives to ethical considerations, India can pave the way for a harmonious integration of Gen AI into its socio-economic fabric.
